SSA Global Delivers First Product in ERP Convergence Strategy
August 16, 2004 Alex Woodie
SSA Global‘s ERP product convergence strategy came to life this month, when it announced the availability of SSA ERP LN, which is based on its Baan ERP product and runs on Unix servers. For the company’s large iSeries installed base, SSA Global announced a similar plan to converge its BPCS, PRMS, Infinium, and PRISM products, which were all designed to run on OS/400 servers, onto a new product to be called ERP LX. This ERP LX product will be delivered in early 2005.
SSA ERP LN Version 6.1 is based on the next-generation ERP product code-named “Gemini” that Baan had been developing when SSA Global acquired it from its corporate parent, Invensys, in July 2003. Despite the fact that Baan had spent $100 million in developing Gemini, SSA Global executives didn’t think Version 6.0 was ready for prime time when it acquired Baan, so it continued development. Now the code is ready, the company says.
SSA Global wants its Baan, MANMAN/HP, and MK customers to move to SSA ERP LN, and it has developed migration kits to help these customers make the move. SSA Global acquired the MANMAN and MK ERP packages along with PRMS and 10 other business applications when it purchased Computer Associates‘ interBiz unit in April 2002. MANMAN, as it was called, was originally designed to run on HP 3000 and VAX minicomputers–both of which have been sunsetted by their owner, Hewlett-Packard–while MK Manufacturing, as it was originally called, runs on Windows, Unix, and Linux systems. Most Baan ERP customers run the software on Unix servers, although there are a handful of Baan implementations on OS/400, company officials have said.
In addition to a new SOA (that’s the hot new acronym for “service oriented architecture,” which we used to call Web-based services) that features a Web-based user interface and supports XML and SOAP, there are functional improvements in SSA ERP LN that manufacturers will benefit from. The company says that this release delivers “true” lean-based manufacturing capabilities, improved freight management (the first Gemini release didn’t integrate with Baan’s logistics or CRM applications, which is one of the reasons why SSA Global held off releasing Version 6.0), and comprehensive field service capabilities.
SSA Global is segmenting its two converged ERP products–SSA ERP LN and SSA ERP LX–by industries; as it turns out, it’s also segmenting the products by operating system. SSA ERP LN is aimed at companies in so-called discrete industries, such as aerospace and defense, automotive, electronics manufacturing, industrial machinery and equipment, while SSA ERP LX will be aimed at those in process industries, such as chemical, consumer packaged goods, food and beverage, pharmaceutical, metals, refining, forestry, textiles, and electric utilities. With SSA ERP LN, SSA Global has delivered solution templates that help to customize the application for a customer’s specific industry, and it will likely announce solution templates for SSA ERP LX, its iSeries convergence products, when it ships next year.
SSA Global’s convergence strategy will begin to impact iSeries shops in early 2005, when the company releases SSA ERP LX. This will be the convergence platform for the company’s stable of OS/400-based ERP applications, which includes System Software Associates’ own BPCS product as well as the PRMS, Infinium, PRISM, and KBM applications. SSA Global acquired Infinium for $95 million in November 2002, it acquired the PRISM application in its acquisition of the Marcam unit from Invensys for an undisclosed amount this July, and acquired KBM in its interBiz buy.
SSA Global’s plans to consolidate its ERP products should not come as a surprise to anybody who’s been following the situation or reading this newsletter. Company executives gave Guild Companies the first inkling that it planned to eventually whittle the number of ERP products it its stable down to one or two core products in 2002. Executives specifically talked about converging BPCS and PRMS, two popular ERP packages that have very similar architectures and accounted for the bulk of SSA Global’s customers at the time. Then, at its user conference last September, SSA Global divulged its product convergence plans directly to its customers (see “SSA Outlines Product Convergence, Branding Strategy”).
SSA Global had originally planned to call its two core, converged ERP product lines “SSA iSeries ERP” and “SSA Unix ERP” (see graphic from SSA Global). These names were changed to SSA ERP LX and SSA ERP LN, respectively. As the graphic shows, the Masterpiece suite of financial applications, which the company bought from Computer Associates in 2002, plays a central role with both of its core ERP lines. SSA Global executives have said they are very impressed with the Masterpiece suite, which they consider a tier-one application that can go head-to-head with the best financials in the business.
SSA Global hopes that its customers will embrace its consolidation strategy and the path that it opens to move the ERP products forward and to keep them current. For users of the major ERP suites, it will likely be the only way they can get new functionality. Although Michael Greenough, SSA Global’s chief executive, has pledged never to sunset a product, company executives have made it clear that SSA Global won’t pay for separate development efforts for the dozens of products it has acquired in the last two and a half years. Indeed, cost-cutting and smart management are the key ingredients that have allowed the privately held Chicago company to turn the ship around and operate a profitable business after a bankruptcy in 1999 and a buyout by Gores Technology Group in 2000. Its upcoming initial public offering on Nasdaq will only intensify the pressure to keep costs down (see “SSA Global Files to Go Public”).
Instead of separate development efforts for each ERP line, SSA Global wants to create a single middleware stack (see graphic from SSA Global ) that connects to all of its various ERP systems on the back-end, and plug into a into a single user interface and a variety of add-on products off the front-end, including business intelligence, product lifecycle management, content management, and CRM, as part of its product extension strategy. The technology used in this middleware layer is IBM WebSphere and Java.
SSA Global officials were not available for comment before press time. The company is holding its annual user conference, the SSA Global Client Forum 2004, from September 26 through 29 in Philadelphia.